HRM Characteristics of an Ideal Appraisal System Essay

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HRM

Characteristics of an Ideal Appraisal System

The concept of performance appraisal is not new; it has been undertaken for many years at organizational, departmental and individual levels as part of performance management strategies. There are many different types of appraisal systems, from standard feedback assessment to peer-based reviews and 360 degree reviews. The issue with many systems is not the underlying theory, but the way it is applied. An appraisal is simply a tool; the value will be in the way it is used rather than its presence. Therefore, when looking at appraisals it may be argued there are a number of key elements which should ideally be present in appraisal.

The key characteristics of any appraisal system will include the need to be clear and understood by those who use the system to give and/or receive appraisals with clear policy and implementation guidelines. The system should also have clear, unambiguous and meaningful measures, to be perceived as fair by those who are assessed or appraised; to utilize objective measures and measures that create value for the employer and support the organizations goals along with the ability to be undertaken in an efficient manner which has minimal opportunity costs attached. Looking at each of these characteristics the importance of each may be considered.

The first characteristic looks to the framework and general understanding of an appraisal system. If an appraisal is taking place it is important that those participating understand what is occurring and why it is occurring. In an early study of performance appraisals Burke and Wilson (1969) identified three main purposes behind the appraisals taking place. Firstly as a basis for employee progression linking with pay increases and promotions, secondly as a framework to be used for long-range planning and thirdly as a tool to assess areas of potential performance improvement for employees and aid with the planning of training (Burke and Wilson, 1969). In many instances today all of these may be a part of the purpose for appraisals, along with additional aspects, such as a role in motivation management (Buchanan and Huczynski, 2010).

For the appraisal system to work it is necessary that those taking part understand the purposes and motivations of the firm in performing the assessments. For example, if a manager believes the appraisals are undertaken to improve the individual performance of employees and give them feedback they are likely to manage the process effectively. However, if the firm is also using then data for long-range planning, such as with the creation of an internal skills audit/inventory, they will be disappointed if the manager is not recording the additional information needed. The manager may perceive this as an additional and unnecessary task (Buchanan and Huczynski, 2010). This is a communication issue, and is not limited to management.

The communication of the purpose of the appraisal is also linked to the way it is implemented with supporting policies. If the management and employees do not believe that the appraisal system has any real use they may not be motivated to take part, or to be committed to it. The way it is implemented will communicate not only the core purpose, but also the commitment of the firm to the system. The implementation policies will include details of how it is to take place for example this may should incorporate details on how frequently the appraisals should take place and who is responsible for conducting appraisals, methods of appraisal such as how the data to be used will be collected and details on the way that the appraisal interview is to be considered, and how disputes should be handled, including a grievance or appeal procedure. These are all important in a fair and effective system as there needs to be a universal application of the system for it to be seen as fair and to provide the desired results. Uneven or ineffective implementation will undermine the core purpose of the system.

The second characteristic is that the elements the appraisal system is appraising or measuring need to be meaningful. This is noted by The GTE vice president Randall MacDonald when talking of assessing the performance of different departments, he states;

"I need to know whether we're delivering on our strategies. I need measures and metrics to make the business case that we're effective HR would record 250,000 hours of training and conclude they must have been doing a good job In fact, it indicates you were busy, not whether your [employees] were satisfied and more effective in their jobs"

(MacDonald quoted in Dobbs, 2000, p20).

The importance of use and relevance can be seen in many areas, and also justifies a focus on the use of objective rather than subjective measures. For example, the appraisal may seek to assess employee productivity, however, hours worked might not equate to productivity, and output may also be misleading if the output is substandard, or the employee is helping others. The characteristic is meaningful measures, that are designed for the specific firm and industry, rather than advocating a prescriptive approach.

This also leads to one of the main issues; the perception of fairness. The appraisal should relate to the tasks that the employee knows they should be performing and then standards to which they should be performing. If the worker does not know or understand the expectation of the employer they cannot be expected to meet that standard and judging them against an unknown standard will be seen as unfair (Boe, 2008). This also leads back to the need for clear guidelines. The appraiser and the employee should know and understand the minimum acceptable standards by which they will be judged (Boe, 2008). This means measures need to be used that are specific rather than simple generalities which may also lead to biased appraisals (Boe, 2008).

The system should also avoid the potential for personal bias as this will also lead to a perception of unfairness by employees. There has been a wealth of research which indicates the way appraisal may be performed in a biased manner, such as managers using the appraisal system to reward employees that are loyal to themselves, or in a manner that reflects friendships, in order to justify promotions or pay rises (Longenecker et al., 1987; Levy and Williams, 2004). Where this occurs and there is a perception of unfairness it will not only undermine the entire appraisal system it will also de-motivate staff and have a negative impact on the workforce, as seen with the concept of equity theory (Buchanan and Huczynski, 2010).

To undertake this in a manner that is seen as fair and fully comprehensive it may be argued that the ideal system will have input from numerous sources. This may include both subjective and objective measures, and include data from performance measures on the shop floor as well as data such as publicity from the HR department. A more controversial inclusion may be the way peer reviews are used to gain feedback from those the employee works with, a measure that may be particularly important where promotions are considered and culture is being assessed (Atkins and Wood, 2002). However, just as this may be useful, there is also increased potential bias from the subjective nature of this approach (Atkins and Wood, 2002).

The system would also have a uniform approach to the actual appraisal process, with the framework for the interview including a summary at the end, including a recap on any agreed or needed action on the part of either party, and a full record kept of the appraisal that has taken place, with both parties signing or indicating their agreement or disagreement. The legal and ethical need for a record, which will also hold those accountable for the appraisals, is an essential element of the process. This will…[continue]

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